UNCLAS SECTION 01 OF 02 MONTERREY 000349

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV EIND EINV SOCI ASEC EAID ECON MX
SUBJECT: SAN LUIS POTOSI GOVERNOR-ELECT OUTLINES PLANS

MONTERREY 00000349 001.2 OF 002



1. (SBU) Summary: At a recent meeting with the Consul General
(CG), San Lusi Potosi Governor-elect Fernando Toranzo Fernandez,
a member of the Partido Revolucionario Institucional (PRI),
outlined his plans to improve economic, healthcare and security
conditions in his state. He predicted that he would have broad
support for his programs in state congress, which is dominated
by the rival Partido Accion Nacional (PAN). Toranzo repeatedly
asked for USG assistance for his programs. End summary.




2. (SBU) During a recent meeting with the Consul General, San
Lusi Potosi Governor-elect Fernando Toranzo Fernandez stated
that his incoming administration plans to focus on economic,
security, and health issues. Although a member of the Partido
Revolucionario Institucional (PRI), Toranzo predicted that he
will have a solid working relationship with a state congress
dominated by the rival Partido Accion Nacional (PAN), because
many PAN members supported his election bid due to a schism in
their party.



Economy

--------------




3. (SBU) Toranzo said one of his top priorities will be to
attract additional industry and job opportunities throughout the
state and requested USG help in promoting economic development.
He trumpeted the planned arrival of new businesses in the
capital city of San Luis Potosi's Tres Naciones industrial park
over the next few months. However, Toranzo noted that the
majority of the state's industry was centered in the capital.
The real challenge, he stated, are the vast outlying areas that
are economically depressed with high-poverty conditions and
contain large indigenous populations. (Note: Around 33 percent
(731,000) of the state's estimated population of 2.4 million
lives in the capital city. End note.)



Tax Holiday to Prevent Job Losses?

--------------




4. (SBU) A key element of Toranzo's election platform was a six
month tax holiday for businesses. By not having to pay the
state's two percent payroll tax, he told the CG that he believed
companies will be encouraged to retain workers during the
economic downturn. (Major U.S. companies that would benefit
include GM, Eton, 3M and Remy.) However, current state
Secretary of Economic Development Carlos Barcena Pous told the
CG in a separate meeting that he believed Toranzo's tax relief
plan would not retain jobs and would cause a significant drop in
state revenues (septel).



Healthcare

--------------




5. (SBU) A physician by profession, Toranzo was passionate
about the need to provide improved healthcare access to
lower-income indigenous populations, where the government often
has no control over healthcare practices. He said that, during
his previous stint as Secretary of Health, state efforts had
reduced infant and maternal mortality in these groups by over 70
percent. The state does not have sufficient medical care
facilities to treat its large number of dengue cases, he stated,
adding that, fortunately, malaria and chaga's disease were not
prevalent. Toranzo requested USG assistance in his quest to
improve healthcare. (Note: The state has an estimated
indigenous population of around 264,000. End note.)




6. (SBU) Authorities, he opined, should adapt healthcare
practices to fit native customs. As an example, he noted that

MONTERREY 00000349 002.2 OF 002


the traditional use of sharpened bamboo to sever umbilical cords
had caused infections during childbirth. After health officials
had unsuccessfully tried to introduce stainless steel
instruments - meeting strong resistance from indigenous leaders
- they convinced indigenous midwives to use sterilized bamboo,
thereby dropping the infection rate significantly.



Security Lacking

--------------




7. (SBU) Toranzo admitted that security in his state had
significantly deteriorated, largely due to organized crime
activities. He lamented the general public's lack of confidence
in the state's ability to provide adequate security. Toranzo
said that state police needed additional training and
improvements in intelligence gathering capabilities and asked
for USG assistance in these areas. A/Legatt will engage in
further discussions on this issue with Toranzo and his team in
coming months.



Comment

--------------




8. (SBU) Toranzo, an open and gregarious interlocutor, has
served as a member of the state legislature and twice as the
state's Secretary of Health. Although a PRI candidate, Toranzo
has broad appeal with both PRI and PAN voters, and served as the
Secretary of Health for the outgoing PAN administration.
Historically, SLP has been a PAN stronghold. The outgoing PAN
governor won election in 2003 by a margin of over 10 percent of
the vote. In 2009, Toranza beat out his PAN rival 45 percent to
42 percent. Much of his success can be attributed to his appeal
among lower-income voters and infighting among the state's
various PAN factions.




9. (SBU) The state's export driven manufacturing sector has
been adversely impacted by the U.S. recession. Expatriate
remittances, on which many lower-income families rely, have also
dropped significantly. Toranzo's platform, with its focus on
economic development and healthcare assistance to the rural
poor, is an attempt to mitigate these problems among one of his
key voter bases. However, he appears to realize that the
magnitude of his plans, especially in light of a tighter federal
budget (as with most Mexican states, San Luis Potosi depends
heavily on federal revenue sharing), will require outside
assistance, hence his calls for USG assistance. To accomplish
his ambitious goals, Toranzo will also need continued support
among PAN members of the state congress. Whether that will
continue in Mexico's mercurial political climate remains to be
seen.
GRANDFIELDM